"In terms of the level of interest rates, we still think that they will basically be at zero in 2011 and probably in 2012 as well," he added.
Inflationary concerns aren’t warranted, he explained, especially considering the sluggish growth in jobs.
“I find it hard to believe that we’ll get higher inflation, broadly speaking, at a time when we have a 9.8 percent unemployment rate,” he said.
Goldman , which has issued gloomy predictions for the economy in its investor notes in recent quarters, is more optimistic this time around. Hatzius said the change of heart is because growth in past quarters was based on temporary factors, but now he’s seeing upward movement on longer-term indicators.
“The rate of change is looking a lot better, than it did a year ago or two years ago,” he said.
Hatzius said the signs of growth are positive for the markets, but aren’t trickling down to the public at large, where unemployment is close to 10 percent.